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Han Products manufactures 40,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit

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Han Products manufactures 40,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct materials Direct labour Variable overhead Fixed overhead $ 4.50 10.50 3.50 9.60 Total cost per part $28.10 An outside supplier has offered to sell 40,000 units of part S-6 each year to Han Products for $25.00 per part If Han Products accepts this offer, the facilities now being used to manufacture part 5-6 could be rented to another company at an annual rental of $92,000. However, Han Products has determined that two- thirds of the fixed overhead being applied to part 5-6 would continue even if part 5-6 were purchased from the outside supplier Required: What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Do not round intermediate calculations) 2 Net dollar advantage

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